Bankruptcy and Divorce: What You Need to Consider

Bankruptcy and Divorce: What You Need to Consider

Navigating either bankruptcy or divorce can be confusing and overwhelming. If you have to navigate both at the same time, it can make it even more difficult to determine the appropriate timeline and steps to take. Bankruptcy and divorce can commonly be related as financial concerns are one of the biggest causes of divorce.

If you and your spouse are considering divorce and bankruptcy, here are a few things to consider.

Know the Types of Bankruptcy

There are two common types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is a type that allows you to liquidate your non-exempt assets to relieve your debt. Chapter 13 bankruptcy is a type that reorganizes your debt into a specific time period, allowing you to make one monthly payment. If you maintain your payments within the time frame, the debt is removed.

It’s important to note that not all types of debt are eligible. The types of debt that are usually eligible with bankruptcy include auto loans or credit cards. Student loans and medical debt is not always eligible for bankruptcy filing.

It’s also important to know the requirements of the type of bankruptcy you choose to file. This can not only help you decide if bankruptcy is right for you, but also when you should file.

Consideration 1: The Court Treats Each One Differently

New Jersey courts treat bankruptcy differently based on your marital status. If you’re legally single, married, or divorced, it can make a difference when filing.

Consideration 2: Your Assets are Unknown

One of the biggest challenges of navigating bankruptcy and divorce at the same time is that it’s more difficult to evenly divide assets. If you’re actively in the middle of a bankruptcy, it’s possible that you and your spouse will have fewer assets to divide later.

Consideration 3: It Can Help Navigate Some Parts of Divorce

Filing bankruptcy while going through a divorce may actually help with dividing some assets, especially ones that you no longer want to share together. If you and your soon-to-be ex-spouse have mortgage or auto loans together, for example, it can be difficult to divide evenly who gets what. One person may get stuck with a payment they can’t afford, or don’t want. Filing for bankruptcy jointly may allow you to remove these types of debts.

Consideration 4: There Isn’t a Single Solution

It’s difficult to say what type of bankruptcy, as well as when to file your divorce or bankruptcy with the court, without knowing the details of your case. There isn’t one single answer that applies to everyone’s financial situation. Many factors are important to consider including the total of your debt, the specific assets you have, and where you’re at with filing for both.

Contact an Experienced Bankruptcy Lawyer to Avoid Costly Mistakes

No one expects to file for divorce or bankruptcy, so the thought of doing both at the same time may be overwhelming. Making mistakes can be costly and lead to a lot of inconveniences, for both you and your ex-spouse. It may be a cost-effective option to work closely with a bankruptcy lawyer who can help you avoid mistakes.

Contact a Clifton Bankruptcy Attorney for a Consultation About Bankruptcy in New Jersey Today


If you are struggling with debt, you may need a fresh start financially. An experienced bankruptcy and debt relief attorney can help you explore your options and determine the best course of action for you, your family, and/or your business. The experienced New Jersey bankruptcy lawyers at The Law Office of Silverman & Roedel understand the nuances of New Jersey and federal bankruptcy laws, so we can help you protect your interests. Call us anytime at (973) 772-6411 or fill out the online contact form to schedule a confidential consultation. We have an office conveniently located at 1187 Main Avenue, Suite 2C, Clifton, NJ 07011

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.